Premier Dwight Ball helped smooth the rough road of automobile insurance reform Monday with a doozy of an announcement the day before driving the 2019 budget home.
“As part of Budget 2019, our government will eliminate the remaining tax on automobile insurance in Newfoundland and Labrador,” Ball said to applause from Liberal MHAs, ministers and supporters who made up most of the audience gathered for the auto insurance reforms announcement.
“Eliminating this tax can be added to the suite of reforms and will be dealt with in the House of Assembly. We have worked very hard to not just to stabilize but to bring back sustainable measures to our province and restore confidence for Newfoundlanders and Labradorians.”
The details of the tax elimination will be contained in Tuesday’s budget.
The tax elimination was the sugar coating over a dish of measures announced Monday by Service NL Minister Sherry Gambin-Walsh to help stabilize rising automobile insurance premiums.
A key issue in the provincial government’s ordered review of automobile insurance was whether or not a compensation cap on minor injuries should be imposed like there is in other Atlantic provinces.
The issue was a heated one between the Insurance Bureau of Canada (IBC) — the association that represents insurers — and a group of personal-injury lawyers in the province that formed the Insult To Injury Campaign aimed at protecting accident victims. Both sides fought it out during public hearings held by the Public Utilities Board (PUB), which was tasked to head the review and file a report to the provincial government.
The PUB presented its report to the provincial government on Jan. 29.
Even after the report, when the government met with each side, it found there was no bridging the gap in the road between the two sides.
“When we met with stakeholders to discuss the findings of the PUB report, we could not find a common ground,” Gambin-Walsh said. “There was no consensus among the public or stakeholders on this matter.
“Undoubtedly there has been a considerable amount of debate and very strong opinions brought forward on whether to impose a cap on compensation for minor injuries.”
Gambin-Walsh said the government determined the best option was to increase the current deductible from $2,500 to $5,000 along with a “suite of measures that when implemented will provide the best product possible for consumers, responsive to their priorities.”
Justice and Public Safety Minister Andrew Parsons said the goal was, through the new measure, to see a continued decrease in accidents.
“The best way to prevent claims from going higher and premiums from going higher is to do more on the prevention, enforcement and deterrent side,” he said. “So I think what you will see now is a stabilization, but also see a decrease over time.
“These amendments attempt to get to the root cause of why accidents are happening, with a focus on prevention. So, instead of imposing caps on victims, we took a structural approach to stabilizing rates, believing it is not for government to define what is considered a minor injury. Distracted driving, speeding, aggressive driving, no seatbelts and impaired driving are all contributing to a loss of life on our roadways.
“The claims process as it exists requires the victim to prove the injury, with checks and balances in place. That will not change, but we do hope that procedural changes will provide a faster resolution process and cut down on insurance fraud. Establishing diagnostic and treatment protocols for common injuries like sprains and strains will help people get better, sooner. Our government is working hard to ensure all Newfoundlanders and Labradorians have access to justice. It is our belief that access would have been greatly reduced if a cap had been imposed.”
Some of the key changes to the legislation announced Monday include an increase in the deductible from $2,500 to $5,000 for bodily injury claims; introduction of treatment protocols for common injuries; no access to the Uninsured Automobile Fund for losses by uninsured motorists; direct compensation for property damage; requirement for insurance companies to notify the Registrar of Motor Vehicles of the cancellation or expiration of insurance policies; and changes to procedural rules for motor vehicle collision claims.
Proposed amendments will also provide a mandated insurance discount for winter tire usage, implementation of underwriting guidelines concerning the optional use of telematics, and changes to the rate-setting process.
Lawyer Colin Feltham of the Campaign to Protect Accident Victims said the group is pleased with the measures announced.
“We agree that it is a very balanced approach that provides benefits for consumers while at the same time it is protecting the rights of accident victims, and all Newfoundlanders and Labradorians,” Feltham said. “We are pleased they didn’t take the approach of putting in a cap. They actually took the time to do a thorough review, looked at all the evidence and came to their own conclusions.”